That’s according to a report Tuesday (July 21) from Bloomberg News, which calls the Apple Upgrade service one of the largest-ever changes to how Apple sells its products.
Due to launch July 28, the program will support most iPhone, Mac, iPad and Apple Watch models, the report added, citing sources with knowledge of the matter. Klarna, those sources said, is serving as Apple Upgrade’s financial backer.
The report said Apple Upgrade will work like a subscription. Users can pay off devices early in their term, upgrade earlier to newer models, or keep the original device until the leasing period ends. As with a car lease, the device could be returned when the term is up.
PYMNTS has contacted both Apple and Klarna for comment but has not yet gotten a reply.
As Bloomberg notes, the program comes in the wake of Apple’s recent price increases — to the tune of hundreds of dollars — on several of its devices amid an industrywide memory shortage.
Apple CEO Tim Cook told the Wall Street Journal recently that memory chip costs are unlike anything he’s seen in 40 years.
“We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable,” Cook said.
However, those increases did not extend to the iPhone, which allowed Apple to escape a sales slump that has hit other smartphone companies during the second quarter.
The company is also widely expected to raise the cost of a new iPhone when the latest model debuts in September, Bloomberg added.
The report said Apple aims to promote the program as a way to have lower payments than what current financing programs offer. The tech giant also intends to phase out new enrollments for its current iPhone payment programs — the iPhone Upgrade Program and standard financing — in favor of the Apple Upgrade service.
According to Bloomberg, Apple had been considering its own in-house iPhone and hardware subscription program, but called off those plans in 2024. The report argues that teaming with Klarna gives Apple the benefit of offering such a way to purchase its products without assuming the financial burden.
